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The Star
a day ago
- Business
- The Star
Ringgit rallies against greenback on weak US data
KUALA LUMPUR: The ringgit extended its gains against the US dollar at Friday's open, buoyed by continued weakness in US economic data, an analyst said. At 8 am, the local unit strengthened to 4.2095/2270 against the greenback, from Thursday's close of 4.2155/2245. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) fell 0.72 per cent to 97.0921, its lowest since March 2022, as data indicated a cooling labour market and moderating inflation trajectory. He noted the core Producer Price Index (PPI) for May rose 3.0 per cent year-on-year, below the consensus estimate of 3.1 per cent. Initial jobless claims also rose to 248,000 last week, higher than the forecast of 242,000. "Such data are seen as critical in shaping the US Federal Reserve's (Fed) stance ahead of the Federal Open Market Committee (FOMC) meeting on June 17 and 18,' he told Bernama. Mohd Afzanizam said while the Fed is expected to keep the Federal Funds Rate unchanged at 4.50 per cent, market participants will be watching the central bank's quarterly economic projections closely. "In March, Fed officials projected the policy rate at 3.9 per cent for 2025, which implies two rate cuts this year. "On that note, we believe emerging market currencies, including the ringgit, are poised to appreciate,' he said. At the same time, the ringgit traded mostly lower against a basket of major currencies. It rose against the euro to 4.8860/9063 from Thursday's close of 4.8765/8869, but weakened vis-à-vis the Japanese yen to 2.9412/9539 from 2.9329/9394, and slipped against the British pound to 5.7363/7601 from 5.7213/7335. Against ASEAN currencies, the ringgit was mixed. It edged up against the Philippine peso to 7.54/7.58 from 7.55/7.57 and gained slightly versus the Indonesian rupiah to 259.1/260.3 from 259.5/260.2. However, it eased against the Singapore dollar to 3.2936/3078 from 3.2934/3006, and declined against the Thai baht to 13.0124/0754 from 12.9828/13.0173. - Bernama
The Sun
a day ago
- Business
- The Sun
Ringgit rallies against greenback on weak US data
KUALA LUMPUR: The ringgit extended its gains against the US dollar at Friday's open, buoyed by continued weakness in US economic data, an analyst said. At 8 am, the local unit strengthened to 4.2095/2270 against the greenback, from Thursday's close of 4.2155/2245. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) fell 0.72 per cent to 97.0921, its lowest since March 2022, as data indicated a cooling labour market and moderating inflation trajectory. He noted the core Producer Price Index (PPI) for May rose 3.0 per cent year-on-year, below the consensus estimate of 3.1 per cent. Initial jobless claims also rose to 248,000 last week, higher than the forecast of 242,000. 'Such data are seen as critical in shaping the US Federal Reserve's (Fed) stance ahead of the Federal Open Market Committee (FOMC) meeting on June 17 and 18,' he told Bernama. Mohd Afzanizam said while the Fed is expected to keep the Federal Funds Rate unchanged at 4.50 per cent, market participants will be watching the central bank's quarterly economic projections closely. 'In March, Fed officials projected the policy rate at 3.9 per cent for 2025, which implies two rate cuts this year. 'On that note, we believe emerging market currencies, including the ringgit, are poised to appreciate,' he said. At the same time, the ringgit traded mostly lower against a basket of major currencies. It rose against the euro to 4.8860/9063 from Thursday's close of 4.8765/8869, but weakened vis-à-vis the Japanese yen to 2.9412/9539 from 2.9329/9394, and slipped against the British pound to 5.7363/7601 from 5.7213/7335. Against ASEAN currencies, the ringgit was mixed. It edged up against the Philippine peso to 7.54/7.58 from 7.55/7.57 and gained slightly versus the Indonesian rupiah to 259.1/260.3 from 259.5/260.2. However, it eased against the Singapore dollar to 3.2936/3078 from 3.2934/3006, and declined against the Thai baht to 13.0124/0754 from 12.9828/13.0173.
Miami Herald
3 days ago
- Business
- Miami Herald
CPI inflation report resets interest rate cut bets
Attention shoppers: If you thought the prices of kitchen tables and car insurance ticked up last month, those tingles were right on the money. By the same token, bargain hunters found deals on airline fares, new and used vehicles and the gasoline to power all three modes of transportation. Don't miss the move: Subscribe to TheStreet's free daily newsletter Overall, U.S. inflation rates rose less in May than expected despite the uncertainty of the impact of tariffs and trade wars. The focus now shifts to whether the high interest rates on consumer loans -- including credit cards and home mortgages -- will dip. In short, the Bureau of Labor Statistics has spoken with the latest monthly CPI figures and now it's up to the Federal Reserve Board to act, or not, on high post-pandemic interest rates. Bloomberg/Getty Images The May CPI figures rose slightly to 2.4% from last year, with the monthly core CPI rate stripped of volatile food and energy prices up 0.1%. The overall inflation rate also moved up 0.1%, in part because gasoline and, yes, egg prices dipped. Experts were expecting a monthly core hike of 0.2% Related: Fed Chair hit with savage message on interest rates These new numbers, released June 11, are slightly hotter than the April figures, and don't reflect, according to experts, the impact of President Trump's tariffs trickling down into your wallets. Trump, meanwhile, took a break from touting his administration's new trade deal with China on his Truth Social platform to exhort that the Fed once again cut the Federal Funds Rate in light of the May CPI rate: "GREAT NUMBERS! FED SHOULD LOWER ONE FULL IMPORTANT!!! The Federal Reserve sets monetary policy to keep the nation's inflation and unemployment rates low at the same time. This dual mandate is often at odds because higher interest rates lower inflation but hike the loss of jobs, while lower interest rates decrease unemployment rates but increase inflation. The May jobs data from the Labor Department were slightly higher than expected but down from April. Unemployment is 4.2%, historically low, but up from 3.4% in 2023. Absent a big uptick in unemployment, Fed watchers' attention is now firmly on inflation. The Fed's unofficial goal is core inflation (inflation minus volatile energy and food prices) of 2%. PCE inflation is the Fed's favored measure. In April, core PCE was 2.5%. May Labor Department figures on jobs were slightly higher than expected but down from April. This soft jobs report followed by the May CPI number, has Fed watchers mulling whether the board might slash the Federal Funds Rate by 0.25% from 4.25% to 4.50% to 4% to 4.25% this summer. And that's it for the rest of the year. Related: Fed official revamps interest-rate cut forecast for rest of this year The Federal Funds Rate is the rate banks charge overnight to borrow money. The Federal Open Market Committee controls that rate, so when it goes up, so does the cost of borrowing money. Hence, it's more expensive for consumers, as this impacts all sorts of interest rates in the economy. When mortgage rates are high, the housing market dips because it is more expensive to buy houses. Mortgage rates are tied to 10-year Treasury Bond Yields, which are widely considered the risk-free rate in financial models. So when Treasury Yields rise, borrowing for businesses and consumers becomes more expensive. (This is why your credit-card bills have bodaciously high interest rates.) Hence, with inflation relatively stable, certain market watchers aren't optimistic that the FOMC will declare a hefty cut to the Federal Funds Rate when it meets on June 17 and June 18. More Economic Analysis: Hedge-fund manager sees U.S. becoming GreeceA critical industry is slamming the economyReports may show whether the economy is toughing out the tariffs Trump has been both vocal and volatile that interest rates should be slashed, and pronto. The president has made escalating demands directed at Federal Reserve Board Chair Jerome Powell, including a litany of the president's trademark nasty nicknames, such as "Major Loser" and "Mr. Too Late." Additional highlights of the May CPI report include the price of shelter, which at 0.3 percent led all the higher seasonally adjusted rates for medical care, insurance, household furnishing, personal care, and education. For consumers browsing for a new pair of kicks or a summery frock, apparel prices also fell. Experts say the impact of the economic chaos of tariffs and the trade wars on all consumer goods and services may not be felt in your wallets for another three to six months. Some businesses are choosing to absorb all the tariffs, which are essentially a sales tax on imported goods. Others, especially small businesses with tight margins, are passing the cost of the tariffs onto their customers. The CME's closely watched FedWatch tool now projects chances of a rate cut in July at 16.5%, up from 14.4% on June 10. Related: Billionaire fund manager sends strong message on Fed Chair Powell's future The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
4 days ago
- Business
- Miami Herald
Looming inflation data may rock interest rate cut forecasts
New inflation numbers are on the horizon, prompting speculation as to their role in the U.S. economic chaos rattling Wall Street and Main Street. Post-pandemic interest rates on everything from small business loans to consumer credit cards to home mortgages are kicking up the same concern: Too darn high. Related: Jobs report shifts Fed interest rate forecasts Market participants remain downbeat about interest rate cut chances despite President Trump's multiple escalating demands directed at Federal Reserve Board Chair Jerome Federal Reserve sets monetary policy to target low inflation and unemployment. This dual mandate is often at odds because higher interest rates lower inflation but increase job losses, while lower interest rates lower unemployment but increase inflation. Consumer Price Index for All Urban Consumers (CPI-U) increased 2.3% for the 12 months ending April 2025, after rising 2.4% over the same period in March. The April change was the smallest 12-month increase in the all items index since February 2021, according to the Bureau of Labor Statistics. Related: Fed Chair hit with savage message on interest rates Most recently, the president said he wanted to see a full 1% cut in the Federal Funds Rate, currently between 4.25 and 4.50%, the actual interest rate at which depository institutions trade federal funds with each other overnight. Trump maintains that high interest rates are causing dire concern-and, in some cases, despair-among investors, businesses, and consumers. A higher Fed Funds Rate means higher Treasury bond yields. Banks use Treasury yields to set auto, credit card, and mortgage interest rates. Many economic experts say 2025's whiplash trade wars, fueled by Trump's tariff games, are leading the economy into a dangerous landing. Some speculate that a recession or even stagflation could be ahead in the last two quarters of 2025. More Economic Analysis: Hedge-fund manager sees U.S. becoming GreeceA critical industry is slamming the economyReports may show whether the economy is toughing out the tariffs The CME's highly-watched FedWatch tool showed a decline in odds of an interest rate cut this summer. Thus, the odds of the Fed cutting interest rates in the second half of 2025 will increase if next week's May CPI and PPI data support the "May inflation data we've seen thus far, and there is no meaningful progress on trade deals,' according to TheStreet's Chris Versace. May Labor Department figures on jobs were slightly higher than expected but down from April. This soft jobs report led Fed watchers to turn to the CPI as a harbinger of potential Fed action, including a possible quarter-point cut this summer that would serve as the only rate deduction for the year. The May CPI numbers will be released at 8:30 a.m. June 11. If that figure is lower or higher than expected, it will likely reset interest rate predictions again. Related: Veteran fund manager revamps stock market forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
15-05-2025
- Business
- Yahoo
Billionaire Steven Cohen sends hard-nosed message on US economy, stocks
The stock market's rally since President Donald Trump paused reciprocal tariffs on April 9 has been impressive. The S&P 500 and Nasdaq have surged 18% and 25%, respectively, in hopes that cooler heads and trade negotiations would reduce the risk that tariffs would send the U.S. economy into a tailspin. The surge in stocks has been so impressive that the S&P 500, the benchmark most use to gauge the stock market's strength, has recovered all its tariff-driven losses, shifting from a nearly 20% bear-market loss to a year-to-date return of 0.19%.While optimism has clearly rebounded, not everyone, including the billionaire hedge fund manager Steven Cohen, is convinced that stocks and the U.S. economy are out of the woods. Cohen is a legendary fund manager whose success at SAC Capital made him one of the most prominent money managers ever. He currently runs Point72, another hedge fund with $37 billion in assets under management, and he owns the New York Mets. Cohen commented on the recent stock market rally this week, offering a frank assessment of recession risks and an updated stock outlook that may raise some eyebrows. The Federal Reserve sets the Federal Funds Rate at levels to encourage low unemployment and inflation. Unfortunately, that's not as easy as it sounds. Employment and inflation often run contrary to each other. When the Fed raises interest rates, it slows the economy, crimping inflation but causing unemployment. When it cuts rates, it accelerates the economy, boosting jobs but increasing seen this dynamic play out over the past few years. In 2022, after incorrectly labeling inflation as transitory, Fed Chairman Jerome Powell embarked on the most hawkish pace of rate hikes since the early 1980s to lower inflation. It worked — inflation has slipped below 3% — but it also has caused the unemployment rate to rise, to 4.2% from 3.4% in 2024. Over the past year, we've seen a steady increase in layoffs, including more than 602,000 this year through April, according to Challenger, Gray & Christmas. That's the most since Covid. The economy was already showing signs of wear heading into 2025, and market watchers have become downright pessimistic since Trump unveiled a series of surprising tariffs. In February, the president instituted 25% tariffs on Canada and Mexico, and 10% tariffs on China, which increased to 20% in March. In April, he unveiled harsher than hoped reciprocal tariffs worldwide, including a 10% baseline import tax. While Trump paused most reciprocal tariffs on April 9, a trade war with China caused Chinese tariffs to soar to 145%. The Trump administration recently rolled back those Chinese tariffs to 30% in a sign of good faith while negotiating a broader trade agreement, but the taxes still represent a massive burden on the economy that didn't exist one year ago. Cohen has been tracking the market professionally since 1978, and his decades of experience mean that he's navigated more than his share of good and bad economies and seen plenty of bull and bear the stock market's recent rally is impressive and the progress on trade deals lately is encouraging, Cohen isn't entirely convinced that we're out of the woods yet, given his candid words at the Sohn Investment Conference this week. Cohen said at the conference that the S&P 500 might retest its April lows. He also said that there's a 45% chance the U.S. economy will still wind up in a recession. 'We're not in a recession yet. I think we are going to have significant slowing growth. We think it will probably be a 45% chance of recession. So, that's not insignificant,' said Cohen. Cohen doesn't expect the Fed to move quickly to support the economy or stocks. 'We don't think the Fed's going to act right away because they're still going to be worried about inflation from tariffs,' said Cohen. More Experts: Treasury Secretary delivers optimistic message on trade war progress Shark Tank's O'Leary sends strong message on economy Buffett's Berkshire has crucial advice for first-time homebuyers Cohen says GDP will grow 1.5% or less next year, though. That's not terrible but not as strong as many would like, given GDP clocked in at 3% last summer. Cohen said that Trump's recent actions with China eliminate the 'dire scenario,' but he expects a range-bound market. If the stock market retests its lows, it would be tough news for investors, who have been on a roller-coaster this year. The S&P 500's volatility has soared, leaving many investors wringing their hands over what could happen next. The Treasury bond market may also be signaling problems. The 10-year Treasury note yield has broken out above 4.5% on Wednesday, its highest since mid-February. Rising bond yields can typically present headwinds for stocks, as higher yields make Treasuries more competitive against stocks for in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
